( By Stephen Weru )
Do you not want to be on Medicare? Why?
If you’re an American citizen, you know that you’re required to sign up for Medicare when you turn 65 years. However, what happens when you don’t sign up for Medicare? Are there penalties? Are there other insurance options?
In today’s post, we answer the question, “what happens if you don’t want to be on Medicare?”
Let’s get right into it.
Is Medicare Mandatory?
If you’re 65 years and above or have a disability, you automatically become eligible for Medicare medical coverage. However, it’s not mandatory for you to enroll in Medicare.
You can decline to sign up for Medicare. However, the process is relatively complicated and could result in several negative implications, including lifelong penalties and loss of other benefits.
Keep reading to learn more
What Happens if You Don’t Sign up for Medicare?
If you choose not to sign up for Medicare when you become eligible, you become liable to penalties depending on which part of Medicate you chose not to sign up for.
Failing to sign up for Medicare Part A when you become eligible, results in a 10% increase in your monthly premium for twice the number of years you didn’t enroll. So, if you wait until 67 years to sign up for Part A, you will pay the penalty until you’re 70 years.
Medicare Part B penalties last longer than Part A penalties. The Part B premium penalty increases by 10% every year you don’t sign up for Medicare. So, if you wait for one year, your premium price increases by 10% for as long as you remain enrolled. If you wait for three years, your premium price will have increased by 30% for as long as you’re enrolled.
What if you choose to decline Medicare all through? What will happen?
Well, for starters, withdrawing from Medicare results in you losing access to all other monthly benefits. If you opt-out of Medicare, you’ll no longer receive Social security or Railroad Retirement benefits.
You’ll also have to repay any amount you’ll have received from any of these two programs.
Does Having Extra Insurance Protect Me from Not Signing Up?
If you’re a senior citizen and still under your employer-sponsored group health insurance, or your spouse’s current employer plan, you may delay enrolling to Medicare without the risk of penalties.
You can also opt-out of Medicare if your workplace offers some sort of retiree insurance. However, some retiree insurance plans have Medicare membership as a requisite for eligibility.
But what if you choose private health insurance?
Well, at 65 years, private insurance premiums may be too high for you, and in most cases, they won’t cover all your needs. This is because most private insurance cover 80% of your medical expenses. With such private insurance companies, you may have to dig into your retirement funds to cover extra medical expenses.
Why Wouldn’t You Want Medicare?
Let’s be honest. Why wouldn’t you want Medicare?
If you’re like most Americans, you’ve probably been paying for it for decades. If Medicare taxes are withheld at your workplace, you automatically gain access to premium-free Medicare Part A.
You can choose to reject or sign up for Medicare Part B, which comes with a premium. For 2021, the standard monthly premium for Medicare Part B is set at $148.50. However, even with Medicare Plan B, you only get coverage for 80% of your doctor’s visits and outpatient costs. Medicare also doesn’t cover hearing aids, eye appointments, or dental fees.
For these, you may have to sign up for either private or Medicare supplemental insurance plans.
Whether to be on Medicare or not is a personal choice. However, it’s essential to stay prepared for the future. You wouldn’t want to spend your retirement savings on health care.
Which is why it’s vital to have health insurance coverage. If you don’t want to be on Medicare, you can choose private health insurance or another option.
Just make sure you’re insured.